The Power of ITR (Income Tax Return)

Ever since I published my blog post about the BIR registration guide for freelancers, a lot of people are asking me why they should do it. I know that many of you are having second thoughts of doing so because of our corrupt government and the tedious process involved.

However, aside from the fact that it’s a civic duty, having an ITR at hand has a lot of advantages – and you can only have it if you’re filing and paying your taxes. For freelancers like me, we don’t have a “Certificate of Employment” which is a common requirement when applying for car or housing loan, credit card, or a tourist visa.

The ITR (Income Tax Return) is a powerful proof of your financial capacity, alongside with your bank statements.

Last year, I tried applying for a car loan and it’s been approved even though I don’t have Certificate of Employment or business permits. I only have my ITR and bank statements. Anyway, I just tried but I didn’t pursue the car loan because I’d rather save and pay in full.

And recently, I applied for an Australian Visitor Visa without any hopes of getting approved. But to my surprise, I was granted a multiple-entry visa. So for freelancers who aspire to become a digital nomad, keep in mind that you don’t have to worry about visa applications as long as you have your ITR and bank statements.

Also, we have the TRAIN law now which makes the tax lower compared to the old computation. If you are earning PhP 250,000 below annually, there will be “zero” tax for you. You’ll just have to file it which can easily be done on your computer using the eBIRforms software.

So what’s holding you back? You can endure the registration process but it’s just that. It will be smooth sailing after that.